MERRILL LYNCH
FLORIDA MUNICIPAL
BOND FUND
FUND LOGO
Semi-Annual Report
January 31, 1997
<PAGE>
Officers and Trustees
Arthur Zeikel, President and Trustee
James H. Bodurtha, Trustee
Herbert I. London, Trustee
Robert R. Martin, Trustee
Joseph L. May, Trustee
Andre F. Perold, Trustee
Terry K. Glenn, Executive Vice President
Vincent R. Giordano, Senior Vice President
Donald C. Burke, Vice President
Kenneth A. Jacob, Vice President
Robert A. DiMella, Vice President
Gerald M. Richard, Treasurer
Jerry Weiss, Secretary
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Statements and other information herein are as dated and are subject
to change.
Merrill Lynch Florida
Municipal Bond Fund
Merrill Lynch Multi-State
Municipal Series Trust
Box 9011
Princeton, NJ
08543-9011
<PAGE>
TO OUR SHAREHOLDERS
The Municipal Market Environment
Long-term fixed-income bond yields generally declined over the six
months ended January 31, 1997. Initially, US Treasury bond yields
declined over 45 basis points (0.45%) to 6.45% by late November as
low employment growth and continued low inflation combined to
support lower bond yields. Concurrently, long-term municipal revenue
bond yields, as measured by the Bond Buyer Revenue Bond Index,
declined over 20 basis points to approximately 5.80%. However, signs
of increased economic activity and renewed inflation fears pushed
bond yields up for the remainder of the period. By the end of
January 1997, US Treasury bond yields rose 35 basis points to end
the period at approximately 6.80%. Similarly, long-term municipal
revenue bond yields rose approximately 20 basis points from their
lows in late November to approximately 6.00%. During the six months
ended January 31, 1997, US Treasury bond yields declined
approximately 10 basis points, while tax-exempt bond yields were
essentially unchanged.
Recently, tax-exempt bond yields underperformed their taxable
counterparts despite a continued strong supply position. During the
six-month period ended January 31, 1997, over $88 billion in long-
term tax-exempt bonds was underwritten, essentially unchanged from
issuance a year ago. Approximately $50 billion in new municipal
bonds was issued during the three-month period ended January 31,
1997, representing a decline of over 5% compared to the same period
in 1996. This declining trend in bond issuance was even more
apparent recently. Slightly more than $10 billion in long-term bonds
was issued in January 1997, a decrease of over 15% compared to
January 1996 issuance.
The municipal bond market's recent underperformance relative to
Treasury issues was the result of a number of other factors. The
historic strength of the US equity market attracted significant
investor interest. Additionally, as tax-exempt bond yields declined
again below 6%, some investors temporarily lost interest in the
municipal bond market. If interest rates continue to decline, as
they did at the end of 1994 and throughout 1995, investors, in
general, will quickly adjust to the new levels. The tax advantages
generated by municipal bonds quickly outweigh low nominal yields and
investor demand increases.
<PAGE>
The Presidential and Congressional elections this past November
resurrected some investor concerns regarding continued Federal
deficit reduction and potential legislative restrictions upon the
municipal bond market. This situation was similar to that at the
beginning of 1996 when tax-exempt bond yields were negatively
impacted by fears that legislation reducing the tax advantage of
municipal bonds would be introduced to aid further deficit
reductions.
However, the US Treasury bond market's recent relatively strong
performance resulted in municipal bonds becoming a particularly
attractive investment alternative. At current levels, long-term tax-
exempt revenue bonds yield over 88% of comparable US Treasury bond
yields. Current levels make tax-advantaged products more attractive
than they were at mid-year when yield ratios declined to
approximately 85%. For example, to an investor in the 36% Federal
income tax bracket, a current tax-exempt bond yield of 6% represents
a taxable equivalent yield of approximately 9.37%.
Looking forward, the supply of new bond issuance for 1997 is
expected to be very similar to that of 1996, with most annual
estimates falling in the $170 billion--$175 billion range. Investor
demand is also expected to regain its former strength, with 1997
total municipal redemptions (refundings, maturities and coupon
payments) in the $175 billion--$185 billion range. This overall
balance suggests that the positive technical backdrop the municipal
bond market enjoyed in 1996 could continue in 1997. However, it is
likely that seasonal factors may temporarily distort this overall
balanced technical scenario. During periods of reduced bond
issuance, the ease and ability to purchase tax-advantaged products
at their current attractive levels may be greatly restricted.
Portfolio Strategy
During the six-month period ended January 31, 1997, our strategy was
to remain flexible given the increased volatility in the bond
market. The everchanging perception on the state of the economy, and
the need for monetary tightening by the Federal Reserve Board,
caused large swings in interest rates over this time period.
Flexibility enabled us to take advantage of market fluctuations to
seek to enhance the Fund's total returns. The Fund's defensive
posture at the beginning of the six-month period provided protection
from the increase in bond yields through early September. At this
time, we began purchasing interest rate-sensitive bonds which helped
the Fund perform well in the bond market rally through the end of
November.
During the six months ended January 31, 1997, long-term Florida
issuance actually increased by over 37% compared to the same period
a year earlier. Fortunately, investor interest in Florida tax-exempt
bonds helped absorb this increase in supply. The heavy Florida
supply caused yields on Florida tax-exempt bonds to become
inexpensive relative to the rest of the municipal bond market, but
we anticipate this relationship will reverse in the future.
<PAGE>
Looking forward, we expect to maintain a constructive posture for
the Fund until the economy shows signs of accelerating. We believe
the economy will moderate in the first half of 1997, with the
possibility of reaccelerating at the end of the year, at which time
the Federal Reserve Board may be forced to raise short-term interest
rates in an effort to control inflation.
In Conclusion
We appreciate your ongoing interest in Merrill Lynch Florida
Municipal Bond Fund, and we look forward to serving your investment
needs in the months and years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Robert A. DiMella)
Robert A. DiMella
Vice President and Portfolio Manager
March 5, 1997
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Fund through the
Merrill Lynch Select Pricing SM System, which offers four pricing
alternatives:
<PAGE>
* Class A Shares incur a maximum initial sales charge (front-end
load) of 4% and bear no ongoing distribution or account maintenance
fees. Class A Shares are available only to eligible investors.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.25% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after approximately 10 years. (There is no initial
sales charge for automatic share conversions.)
* Class C Shares are subject to a distribution fee of 0.35% and an
account maintenance fee of 0.25%. In addition, Class C Shares are
subject to a 1% contingent deferred sales charge if redeemed within
one year of purchase.
* Class D Shares incur a maximum initial sales charge of 4% and an
account maintenance fee of 0.10% (but no distribution fee).
None of the past results shown should be considered a representation
of future performance. Investment return and principal value of
shares will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. Dividends paid to each class
of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
PERFORMANCE DATA (continued)
<TABLE>
Performance Summary--Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
5/31/91--12/31/91 $10.00 $10.29 -- $0.408 + 7.14%
1992 10.29 10.37 -- 0.734 + 8.20
1993 10.37 10.67 $0.157 0.831 +12.69
1994 10.67 9.31 -- 0.538 - 7.81
1995 9.31 10.28 -- 0.533 +16.50
1996 10.28 10.11 -- 0.531 + 3.69
1/1/97--1/31/97 10.11 10.05 -- 0.038 - 0.12
------ ------
Total $0.157 Total $3.613
<PAGE>
Cumulative total return as of 1/31/97: +45.31%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
<TABLE>
Performance Summary--Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
5/31/91--12/31/91 $10.00 $10.29 -- $0.378 + 6.82%
1992 10.29 10.37 -- 0.682 + 7.66
1993 10.37 10.67 $0.157 0.777 +12.12
1994 10.67 9.31 -- 0.488 - 8.27
1995 9.31 10.28 -- 0.483 +15.92
1996 10.28 10.11 -- 0.480 + 3.17
1/1/97--1/31/97 10.11 10.05 -- 0.035 - 0.17
------ ------
Total $0.157 Total $3.323
Cumulative total return as of 1/31/97: +41.20%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
<TABLE>
Performance Summary--Class C Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $ 9.48 $ 9.30 -- $0.091 - 0.92%
1995 9.30 10.27 -- 0.472 +15.80
1996 10.27 10.09 -- 0.469 + 2.96
1/1/97--1/31/97 10.09 10.04 -- 0.034 - 0.08
------
Total $1.066
Cumulative total return as of 1/31/97: +18.04%**
<PAGE>
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
PERFORMANCE DATA (continued)
<TABLE>
Performance Summary--Class D Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $ 9.48 $ 9.29 -- $0.101 - 0.92%
1995 9.29 10.27 -- 0.522 +16.52
1996 10.27 10.10 -- 0.520 + 3.58
1/1/97--1/31/97 10.10 10.04 -- 0.038 - 0.13
------
Total $1.181
Cumulative total return as of 1/31/97: +19.43%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
<TABLE>
Recent Performance Results
<CAPTION>
12 Month 3 Month
1/31/97 10/31/96 1/31/96 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares* $10.05 $10.06 $10.32 -2.62% -0.10%
Class B Shares* 10.05 10.06 10.32 -2.62 -0.10
Class C Shares* 10.04 10.04 10.31 -2.62 0.00
Class D Shares* 10.04 10.04 10.31 -2.62 0.00
Class A Shares--Total Return* +2.73(1) +1.27(2)
Class B Shares--Total Return* +2.21(3) +1.14(4)
Class C Shares--Total Return* +2.10(5) +1.21(6)
Class D Shares--Total Return* +2.62(7) +1.34(8)
Class A Shares--Standardized 30-day Yield 4.74%
Class B Shares--Standardized 30-day Yield 4.43%
Class C Shares--Standardized 30-day Yield 4.33%
Class D Shares--Standardized 30-day Yield 4.64%
<PAGE>
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
(1)Percent change includes reinvestment of $0.539 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.143 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.487 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.129 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $0.476 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.126 per share ordinary
income dividends.
(7)Percent change includes reinvestment of $0.528 per share ordinary
income dividends.
(8)Percent change includes reinvestment of $0.140 per share ordinary
income dividends.
</TABLE>
PERFORMANCE DATA (concluded)
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/96 +3.69% -0.46%
Five Years Ended 12/31/96 +6.31 +5.45
Inception (5/31/91)
through 12/31/96 +6.94 +6.16
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/96 +3.17% -0.77%
Five Years Ended 12/31/96 +5.77 +5.77
Inception (5/31/91)
through 12/31/96 +6.40 +6.40
<PAGE>
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 12/31/96 +2.96% +1.97%
Inception (10/21/94)
through 12/31/96 +7.89 +7.89
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 12/31/96 +3.58% -0.56%
Inception (10/21/94)
through 12/31/96 +8.49 +6.49
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
PORTFOLIO ABBREVIATIONS
To simplify the listings of Merrill Lynch Florida Municipal Bond
Fund's portfolio holdings in the Schedule of Investments, we have
abbreviated the names of many of the securities according to the
list below and at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
INFLOS Inverse Floating Rate Municipal Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
RITES Residual Interest Tax-Exempt Securities
S/F Single-Family
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Florida--91.7%
<S> <S> <C> <S> <C>
AAA Aaa $ 1,095 Altamonte Springs, Florida, Health Facilities Authority, Hospital
Revenue Bonds (Adventist Health Systems--Sunbelt), 7% due 10/01/2014 (k) $ 1,269
NR* Aaa 5,000 Brevard County, Florida, HFA, S/F Mortgage Revenue Bonds, AMT, 6.70% due
9/01/2027 (f) 5,122
Brevard County, Florida, Health Facilities Authority Revenue Bonds
(Wuesthoff Memorial Hospital), Series B (c):
AAA Aaa 10,750 7.20% due 4/01/2002 (j) 12,202
AAA Aaa 1,375 Refunding, 6.90% due 4/01/2002 (k) 1,516
AAA Aaa 2,000 Brevard County, Florida, School Board Refunding Bonds, COP, Series A, 5.40%
due 7/01/2010 (b) 2,028
Broward County, Florida, HFA, M/F Housing Revenue Refunding Bonds
(Lakeside Apartments Project) (i):
AAA NR* 1,100 6.90% due 8/01/2015 1,174
AAA NR* 1,100 7% due 2/01/2025 1,174
AAA Aaa 4,000 Celebration Community Development District, Florida (Special Assessment),
6% due 5/01/2010 (c) 4,166
AAA Aaa 12,650 Charlotte County, Florida, Health Care Facilities Revenue Bonds
(Bon Secours Health System), RIB, 8.36% due 8/26/2027 (g)(h) 13,014
A+ A1 11,215 Citrus County, Florida, PCR, Refunding (Florida Power Corporation--Crystal
River), Series A, 6.625% due 1/01/2027 11,979
AAA Aaa 3,490 Collier County, Florida, School Board, COP, 5% due 2/15/2016 (g) 3,258
Dade County, Florida, HFA, S/F Mortgage Revenue Bonds, AMT:
NR* Aaa 170 Series B, 7.25% due 9/01/2023 (d) 178
NR* Aaa 3,690 Series C, 7.75% due 9/01/2022 (f) 3,884
AAA Aaa 5,500 Dade County, Florida, Professional Sports Franchise Facilities, Tax
Revenue Bonds, 5.98%** due 10/01/2027 (c) 955
Dade County, Florida, Seaport, GO, UT:
AAA Aaa 10,000 6.50% due 10/01/2001 (b)(j) 10,940
AAA Aaa 10,000 Refunding, 5.125% due 10/01/2021 (c) 9,268
<PAGE>
AAA Aaa 10,000 Dade County, Florida, Water and Sewer System Revenue Bonds, 5.25% due
10/01/2021 (e) 9,445
AAA Aaa 12,000 Escambia County, Florida, HFA, S/F Mortgage Revenue Refunding Bonds
(Multi-County Program), AMT, 7% due 4/01/2028 (d) 12,687
BBB+ NR* 6,035 Escambia County, Florida, Health Facilities Authority, Health Facility
Revenue Refunding Bonds (Baptist Hospital Inc.), Series B, 6% due 10/01/2014 6,040
Escambia County, Florida, PCR (Champion International Corporation Project):
BBB Baa1 11,620 AMT, 6.90% due 8/01/2022 12,370
BBB Baa1 2,500 Refunding, 6.95% due 11/01/2007 2,720
NR* Aaa 1,775 Florida HFA, Home Ownership Revenue Bonds, AMT, Series G-1, 7.90% due
3/01/2022 (f) 1,870
AAA Aaa 10,420 Florida HFA (Maitland Club Apartments), AMT, Series B-1, 7% due
2/01/2035 (b) 11,042
AAA Aaa 5,000 Florida Ports Financing Commission Revenue Bonds, AMT, 5.375% due
6/01/2027 (c) 4,691
AA Aa 9,595 Florida State Board of Education, Capital Outlay, Public Education,
Refunding, Series A, 7.25% due 6/01/2023 10,521
AAA Aaa 4,750 Florida State Division, Bond Finance Department, General Services
Revenue Bonds (Department of Natural Resource Preservation), Series 2000-A,
6.75% due 7/01/2013 (b) 5,188
AAA Aaa 4,000 Florida State Turnpike Authority, Turnpike Revenue Refunding Bonds,
Series A, 5% due 7/01/2016 (e) 3,674
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Florida (concluded)
<S> <S> <C> <S> <C>
A A $10,505 Hillsborough County, Florida, Capital Improvement Revenue Bonds
(County Center Project), Second Series, 6.75% due 7/01/2002 (j) $ 11,778
AA Aa3 2,250 Hillsborough County, Florida, IDA, PCR, Refunding (Tampa Electric Company
Project), Series 91, 7.875% due 8/01/2021 2,572
AAA Aaa 2,750 Hillsborough County, Florida, Utility Revenue Refunding Bonds, Series B,
6.50% due 8/01/2016 (c) 2,971
<PAGE>
AAA Aaa 10,000 Jacksonville, Florida, Sales Tax Revenue Bonds (River City Renaissance
Project), 5.125% due 10/01/2018 (e) 9,360
AAA Aaa 2,000 Lee County, Florida, Hospital Board of Directors, Hospital Revenue, INFLOS,
9.519% due 4/01/2020 (c)(h) 2,275
Leesburg, Florida, Hospital Revenue Refunding Bonds
(Leesburg Regional Medical Center Project):
A- A 6,110 Series A, 6.125% due 7/01/2018 6,236
A- A 1,515 Series B, 5.625% due 7/01/2013 1,481
NR* VMIG1++ 700 Palm Beach County, Florida, Water and Sewer Revenue Bonds, VRDN, 3.75%
due 10/01/2011 (a) 700
AAA Aaa 2,080 Pasco County, Florida, Health Facilities Authority, Revenue Refunding Bonds
(Gross Adventist Health System--Sunbelt), 7% due 10/01/2014 (k) 2,389
NR* Aaa 350 Polk County, Florida, HFA, Refunding, Series A, 7.15% due 9/01/2023 (f) 367
AAA Aaa 10,055 Port Saint Lucie, Florida, Utility Revenue Bonds, Series A, 6.30%** due
9/01/2021 (e) 2,327
AAA Aaa 3,250 Saint Petersburg, Florida, Health Facilities Authority Revenue Bonds (Allegany
Health System), Series A, 7% due 12/01/2015 (c) 3,608
AAA Aaa 11,085 Sarasota County, Florida, Utility System Revenue Refunding Bonds, Series A,
5.25% due 10/01/2025 (e) 10,413
AAA Aaa 2,800 South Broward, Florida, Hospital District, Hospital Revenue Bonds, RIB,
Series C, 9.399% due 5/01/2001 (b)(h)(j) 3,378
AAA Aaa 9,000 Sunrise, Florida, Utility System Revenue Bonds, Series A, 5.75% due
10/01/2026 (b) 9,013
AAA Aaa 1,475 Tampa, Florida, Allegany Health System Revenue Bonds (Saint Joseph),
6.75% due 12/01/2017 (c) 1,610
Puerto Rico--7.0%
Puerto Rico Commonwealth, Highway and Transportation Authority, Highway
Revenue Bonds, RITES, Series X (h):
A1+ Baa1 7,600 6.122% due 7/01/2004 7,742
A1+ Baa1 10,000 6.222% due 7/01/2005 10,137
Total Investments (Cost--$238,618)--98.7% 250,732
Other Assets Less Liabilities--1.3% 3,194
--------
Net Assets--100.0% $253,926
========
<PAGE>
<FN>
(a)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at January 31, 1997.
(b)AMBAC Insured.
(c)MBIA Insured.
(d)FNMA and GNMA Collateralized.
(e)FGIC Insured.
(f)GNMA Collateralized.
(g)FSA Insured.
(h)The interest rate is subject to change periodically and inversely
based upon prevailing market rates. The interest rate shown is the
rate in effect at January 31, 1997.
(i)FNMA Collateralized.
(j)Prerefunded.
(k)Escrowed to Maturity.
*Not Rated.
**Represents a zero coupon bond; the interest rate shown is the
effective yield at the time of purchase by the Fund.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets and Liabilities as of January 31, 1997
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$238,617,662) (Note 1a) $250,731,658
Cash 47,897
Receivables:
Securities sold $ 4,386,907
Interest 3,992,247
Beneficial interest sold 332,619 8,711,773
------------
Prepaid registration fees and other assets (Note 1e) 9,375
------------
Total assets 259,500,703
------------
Liabilities: Payables:
Securities purchased 4,692,778
Beneficial interest redeemed 386,669
Dividends to shareholders (Note 1f) 209,329
Investment adviser (Note 2) 123,044
Distributor (Note 2) 84,721 5,496,541
------------
Accrued expenses and other liabilities 78,169
------------
Total liabilities 5,574,710
------------
<PAGE>
Net Assets: Net assets $253,925,993
============
Net Assets Class A Shares of beneficial interest, $.10 par value,
Consist of: unlimited number of shares authorized $ 473,931
Class B Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 1,791,894
Class C Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 62,108
Class D Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 198,568
Paid-in capital in excess of par 260,441,235
Accumulated realized capital losses on investments--net (Note 5) (11,538,011)
Accumulated distributions in excess of realized capital gains--
net (Note 1f) (9,617,728)
Unrealized appreciation on investments--net 12,113,996
------------
Net assets $253,925,993
============
Net Asset Value: Class A--Based on net assets of $47,641,981 and 4,739,312 shares
of beneficial interest outstanding $ 10.05
============
Class B--Based on net assets of $180,120,989 and 17,918,943 shares
of beneficial interest outstanding $ 10.05
============
Class C--Based on net assets of $6,233,303 and 621,084 shares
of beneficial interest outstanding $ 10.04
============
Class D--Based on net assets of $19,929,720 and 1,985,678 shares
of beneficial interest outstanding $ 10.04
============
See Notes to Financial Statements.
FINANCIAL INFORMATION (continued)
</TABLE>
<TABLE>
Statement of Operations
For the Six Months Ended
January 31, 1997
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 7,813,507
(Note 1d):
<PAGE>
Expenses: Investment advisory fees (Note 2) $ 720,322
Account maintenance and distribution fees--Class B (Note 2) 477,173
Accounting services (Note 2) 50,253
Transfer agent fees--Class B (Note 2) 42,113
Professional fees 38,331
Printing and shareholder reports 22,444
Account maintenance and distribution fees--Class C (Note 2) 18,980
Custodian fees 9,228
Account maintenance fees--Class D (Note 2) 8,661
Transfer agent fees--Class A (Note 2) 8,555
Trustees' fees and expenses 6,647
Registration fees (Note 1e) 3,387
Transfer agent fees--Class D (Note 2) 3,134
Pricing fees 3,010
Transfer agent fees--Class C (Note 2) 1,470
Other 2,981
------------
Total expenses 1,416,689
------------
Investment income--net 6,396,818
------------
Realized & Realized gain on investments--net 2,452,612
Unrealized Change in unrealized appreciation on investments--net 471,587
Gain on ------------
Investments --Net Net Increase in Net Assets Resulting from Operations $ 9,321,017
(Notes 1b, ============
1d & 3):
See Notes to Financial Statements.
</TABLE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: Jan. 31, 1997 July 31, 1996
<S> <S> <C> <C>
Operations: Investment income--net $ 6,396,818 $ 13,441,614
Realized gain (loss) on investments--net 2,452,612 (2,079,595)
Change in unrealized appreciation on investments--net 471,587 4,041,591
------------ ------------
Net increase in net assets resulting from operations 9,321,017 15,403,610
------------ ------------
Dividends to Investment income--net:
Shareholders Class A (1,250,985) (2,676,299)
(Note 1f): Class B (4,549,465) (9,896,005)
Class C (147,649) (181,287)
Class D (448,719) (688,023)
------------ ------------
Net decrease in net assets resulting from dividends to
shareholders (6,396,818) (13,441,614)
------------ ------------
<PAGE>
Beneficial Net decrease in net assets derived from beneficial interest
Interest transactions (11,829,119) (7,430,883)
Transactions ------------ ------------
(Note 4):
Net Assets: Total decrease in net assets (8,904,920) (5,468,887)
Beginning of period 262,830,913 268,299,800
------------ ------------
End of period $253,925,993 $262,830,913
============ ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights
<CAPTION>
The following per share data and ratios have been derived Class A
from information provided in the financial statements. For the Six
Months Ended For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: Jan. 31, 1997 1996 1995 1994 1993
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.94 $ 9.86 $ 9.88 $ 10.78 $ 10.66
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .27 .53 .53 .55 .59
Realized and unrealized gain (loss) on
investments--net .11 .08 (.02) (.48) .22
-------- -------- -------- -------- --------
Total from investment operations .38 .61 .51 .07 .81
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.27) (.53) (.53) (.55) (.59)
Realized gain on investments--net -- -- -- -- (.10)
In excess of realized gain on
investments--net -- -- -- (.42) --
-------- -------- -------- -- ------ --------
Total dividends and distributions (.27) (.53) (.53) (.97) (.69)
-------- -------- -------- -------- --------
Net asset value, end of period $ 10.05 $ 9.94 $ 9.86 $ 9.88 $ 10.78
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 3.85%+++ 6.30% 5.47% .39% 7.98%
Return:** ======== ======== ======== ======== ========
Ratios to Expenses, net of reimbursement .69%* .68% .70% .68% .66%
Average ======== ======== ======== ======== ========
Net Assets: Expenses .69%* .68% .70% .68% .69%
======== ======== ======== ======== ========
Investment income--net 5.28%* 5.30% 5.54% 5.23% 5.58%
======== ======== ======== ======== ========
<PAGE>
Supplemental Net assets, end of period (in thousands) $ 47,642 $ 46,765 $ 51,805 $ 69,409 $ 70,610
Data: ======== ======== ======== ======== ========
Portfolio turnover 41.24% 162.83% 178.62% 205.94% 142.59%
======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effect of sales loads.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights (continued)
<CAPTION>
The following per share data and ratios have been derived Class B
from information provided in the financial statements. For the Six
Months Ended For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: Jan. 31, 1997 1996 1995 1994 1993
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.94 $ 9.86 $ 9.88 $ 10.78 $ 10.66
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .24 .48 .49 .49 .54
Realized and unrealized gain (loss) on
investments--net .11 .08 (.02) (.48) .22
-------- -------- -------- -------- --------
Total from investment operations .35 .56 .47 .01 .76
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.24) (.48) (.49) (.49) (.54)
Realized gain on investments--net -- -- -- -- (.10)
In excess of realized gain on
investments--net -- -- -- (.42) --
-------- -------- -------- -------- --------
Total dividends and distributions (.24) (.48) (.49) (.91) (.64)
-------- -------- -------- -------- --------
Net asset value, end of period $ 10.05 $ 9.94 $ 9.86 $ 9.88 $ 10.78
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 3.59%+++ 5.76% 4.93% (.11%) 7.44%
Return:** ======== ======== ======== ======== ========
Ratios to Expenses, net of reimbursement 1.20%* 1.18% 1.21% 1.18% 1.16%
Average ======== ======== ======== ======== ========
Net Assets: Expenses 1.20%* 1.18% 1.21% 1.18% 1.20%
======== ======== ======== ======== ========
Investment income--net 4.77%* 4.79% 5.03% 4.73% 5.07%
======== ======== ======== ======== ========
<PAGE>
Supplemental Net assets, end of period (in thousands). $180,121 $195,097 $205,362 $224,915 $213,840
Data: ======== ======== ======== ======== ========
Portfolio turnover 41.24% 162.83% 178.62% 205.94% 142.59%
======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effect of sales loads.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights (concluded)
<CAPTION>
Class C Class D
For For the For For the
the Six For the Period the Six For the Period
The following per share data and ratios have been derived Months Year Oct. 21, Months Year Oct. 21,
from information provided in the financial statements. Ended Ended 1994++ to Ended Ended 1994++ to
Jan. 31, July 31, July 31, Jan. 31, July 31, July 31,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.92 $ 9.85 $ 9.48 $ 9.92 $ 9.85 $ 9.48
Operating -------- -------- -------- -------- -------- --------
Performance: Investment income--net .24 .47 .37 .26 .52 .40
Realized and unrealized gain on
investments--net .12 .07 .37 .12 .07 .37
-------- -------- -------- -------- -------- --------
Total from investment operations .36 .54 .74 .38 .59 .77
-------- -------- -------- -------- -------- --------
Less dividends from investment
income--net (.24) (.47) (.37) (.26) (.52) (.40)
-------- -------- -------- -------- -------- --------
Net asset value, end of period $ 10.04 $ 9.92 $ 9.85 $ 10.04 $ 9.92 $ 9.85
======== ======== ======== ======== ======== ========
Total Investment Based on net asset value per share 3.64%+++ 5.54% 7.92%+++ 3.91%+++ 6.09% 8.34%+++
Return:** ======== ======== ======== ======== ======== ========
Ratios to Average Expenses 1.30%* 1.28% 1.33%* .79%* .78% .81%*
Net Assets: ======== ======== ======== ======== ======== ========
Investment income--net 4.67%* 4.70% 4.84%* 5.18%* 5.20% 5.39%*
======== ======== ======== ======== ======== ========
<PAGE>
Supplemental Net assets, end of period
Data: (in thousands) $ 6,233 $ 5,738 $ 1,954 $ 19,930 $ 15,231 $ 9,179
======== ======== ======== ======== ======== ========
Portfolio turnover 41.24% 162.83% 178.62% 41.24% 162.83% 178.62%
======== ======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effect of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Florida Municipal Bond Fund (the "Fund") is part of
Merrill Lynch Multi-State Municipal Series Trust (the "Trust"). The
Fund is registered under the Investment Company Act of 1940 as a non-
diversified, open-end management investment company. These unaudited
financial statements reflect all adjustments which are, in the
opinion of management, necessary to a fair statement of the results
for the interim period presented. All such adjustments are of a
normal recurring nature. The Fund offers four classes of shares
under the Merrill Lynch Select Pricing SM System. Shares of Class A
and Class D are sold with a front-end sales charge. Shares of Class
B and Class C may be subject to a contingent deferred sales charge.
All classes of shares have identical voting, dividend, liquidation
and other rights and the same terms and conditions, except that
Class B, Class C and Class D Shares bear certain expenses related to
the account maintenance of such shares, and Class B and Class C
Shares also bear certain expenses related to the distribution of
such shares. Each class has exclusive voting rights with respect to
matters relating to its account maintenance and distribution
expenditures. The following is a summary of significant accounting
policies followed by the Fund.
<PAGE>
(a) Valuation of investments--Municipal bonds and other portfolio
securities in which the Fund invests are traded primarily in the
over-the-counter municipal bond and money markets and are valued at
the last available bid price in the over-the-counter market or on
the basis of yield equivalents as obtained from one or more dealers
that make markets in the securities. Financial futures contracts and
options thereon, which are traded on exchanges, are valued at their
settlement prices as of the close of such exchanges. Short-term
investments with remaining maturities of sixty days or less are
valued at amortized cost, which approximates market value.
Securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or
under the direction of the Board of Trustees of the Trust, including
valuations furnished by a pricing service retained by the Trust,
which may utilize a matrix system for valuations. The procedures of
the pricing service and its valuations are reviewed by the officers
of the Trust under the general supervision of the Trustees.
(b) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the debt markets. Losses may
arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
* Financial futures contracts--The Fund may purchase or sell
interest rate futures contracts and options on such futures
contracts for the purpose of hedging the market risk on existing
securities or the intended purchase of securities. Futures contracts
are contracts for delayed delivery of securities at a specific
future date and at a specific price or yield. Upon entering into a
contract, the Fund deposits and maintains as collateral such initial
margin as required by the exchange on which the transaction is
effected. Pursuant to the contract, the Fund agrees to receive from
or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are
known as variation margin and are recorded by the Fund as unrealized
gains or losses. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of
the contract at the time it was opened and the value at the time it
was closed.
(c) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(d) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income is recognized on the accrual
basis. Discounts and market premiums are amortized into interest
income. Realized gains and losses on security transactions are
determined on the identified cost basis.
<PAGE>
(e) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(f) Dividends and distributions--Dividends from net investment
income are declared daily and paid monthly. Distributions of capital
gains are recorded on the ex-dividend dates. Distributions in excess
of realized capital gains are due primarily to differing tax
treatments for post-October losses.
NOTES TO FINANCIAL STATEMENTS (concluded)
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner. The Fund has also entered into a Distribution
Agreement and Distribution Plans with Merrill Lynch Funds
Distributor, Inc. ("MLFD" or "Distributor"), a wholly-owned
subsidiary of Merrill Lynch Group, Inc.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee based upon the average daily
value of the Fund's net assets at the following annual rates: 0.55%
of the Fund's average daily net assets not exceeding $500 million;
0.525% of average daily net assets in excess of $500 million but not
exceeding $1 billion; and 0.50% of average daily net assets in
excess of $1 billion.
Pursuant to distribution plans (the "Distribution Plans") adopted by
the Fund in accordance with Rule 12b-1 under the Investment Company
Act of 1940, the Fund pays the Distributor ongoing account
maintenance and distribution fees. The fees are accrued daily and
paid monthly at annual rates based upon the average daily net assets
of the shares as follows:
Account Distribution
Maintenance Fee Fee
Class B 0.25% 0.25%
Class C 0.25% 0.35%
Class D 0.10% --
<PAGE>
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S"), a subsidiary of ML & Co.,
also provides account maintenance and distribution services to the
Fund. The ongoing account maintenance fee compensates the
Distributor and MLPF&S for providing account maintenance services to
Class B, Class C and Class D shareholders. The ongoing distribution
fee compensates the Distributor and MLPF&S for providing shareholder
and distribution-related services to Class B and Class C
shareholders.
For the six months ended January 31, 1997, MLFD earned underwriting
discounts and MLPF&S earned dealer concessions on sales of the
Fund's Class A and Class D Shares as follows:
MLFD MLPF&S
Class A $ 520 $ 4,790
Class D $2,146 $17,287
For the six months ended January 31, 1997, MLPF&S received
contingent deferred sales charges of $186,669 and $3,746 relating to
transactions in Class B and Class C Shares, respectively.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-
owned subsidiary of ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, MLFDS, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended January 31, 1997 were $120,450,080 and
$102,311,095, respectively.
Net realized and unrealized gains as of January 31, 1997 were as
follows:
Realized Unrealized
Gains Gains
Long-term investments $ 2,017,606 $12,113,996
Financial futures contracts 435,006 --
----------- -----------
Total $ 2,452,612 $12,113,996
=========== ===========
As of January 31, 1997, net unrealized appreciation for Federal
income tax purposes aggregated $12,113,996, of which $12,416,472
related to appreciated securities and $302,476 related to
depreciated securities. The aggregate cost of investments at January
31, 1997 for Federal income tax purposes was $238,617,662.
<PAGE>
4. Beneficial Interest Transactions:
Net decrease in net assets derived from beneficial interest
transactions was $11,829,119 and $7,430,883 for the six months ended
January 31, 1997 and for the year ended July 31, 1996, respectively.
Transactions in shares of beneficial interest for each class were as
follows:
Class A Shares for the
Six Months Ended Dollar
January 31, 1997 Shares Amount
Shares sold 481,093 $ 4,844,566
Shares issued to shareholders
in reinvestment of dividends 50,550 506,630
------------ ------------
Total issued 531,643 5,351,196
Shares redeemed (498,067) (5,002,134)
------------ ------------
Net increase 33,576 $ 349,062
============ ============
Class A Shares for the
Year Ended Dollar
July 31, 1996 Shares Amount
Shares sold 430,815 $ 4,316,851
Shares issued to shareholders
in reinvestment of dividends 104,910 1,050,031
------------ ------------
Total issued 535,725 5,366,882
Shares redeemed (1,082,446) (10,807,359)
------------ ------------
Net decrease (546,721) $ (5,440,477)
============ ============
Class B Shares for the Six Dollar
Months Ended January 31, 1997 Shares Amount
Shares sold 1,122,841 $ 11,279,728
Shares issued to shareholders
in reinvestment of dividends 173,625 1,740,206
------------ ------------
Total issued 1,296,466 13,019,934
Automatic conversion
of shares (52,047) (521,967)
Shares redeemed (2,958,265) (29,648,029)
------------ ------------
Net decrease (1,713,846) $(17,150,062)
============ ============
<PAGE>
Class B Shares for the
Year Ended Dollar
July 31, 1996 Shares Amount
Shares sold 3,570,813 $ 35,905,936
Shares issued to shareholders
in reinvestment of dividends 353,333 3,535,438
------------ ------------
Total issued 3,924,146 39,441,374
Automatic conversion
of shares (94,686) (1,282,755)
Shares redeemed (5,018,931) (49,984,983)
------------ ------------
Net decrease (1,189,471) $(11,826,364)
============ ============
Class C Shares for the Six Months Dollar
Ended January 31, 1997 Shares Amount
Shares sold 195,937 $ 1,959,014
Shares issued to shareholders
in reinvestment of dividends 9,473 94,810
------------ ------------
Total issued 205,410 2,053,824
Shares redeemed (162,629) (1,630,933)
------------ ------------
Net increase 42,781 $ 422,891
============ ============
Class C Shares for the Year Dollar
Ended July 31, 1996 Shares Amount
Shares sold 484,696 $ 4,860,354
Shares issued to shareholders
in reinvestment of dividends 11,753 117,319
------------ ------------
Total issued 496,449 4,977,673
Shares redeemed (116,573) (1,161,018)
------------ ------------
Net increase 379,876 $ 3,816,655
============ ============
Class D Shares for the Six Months Dollar
Ended January 31, 1997 Shares Amount
<PAGE>
Shares sold 583,492 $ 5,875,267
Automatic conversion
of shares 52,111 521,967
Shares issued to shareholders
in reinvestment of dividends 17,293 173,294
------------ ------------
Total issued 652,896 6,570,528
Shares redeemed (202,190) (2,021,538)
------------ ------------
Net increase 450,706 $ 4,548,990
============ ============
Class D Shares for the Dollar
Year Ended July 31, 1996 Shares Amount
Shares sold 808,887 $ 7,797,601
Automatic conversion
of shares 94,852 1,282,755
Shares issued to shareholders
in reinvestment of dividends 32,096 320,506
------------ ------------
Total issued 935,835 9,400,862
Shares redeemed (332,993) (3,381,559)
------------ ------------
Net increase 602,842 $ 6,019,303
============ ===========
5. Capital Loss Carryforward:
At July 31, 1996, the Fund had a capital loss carryforward of
approximately $21,109,000, of which $18,833,000 expires in 2003 and
$2,276,000 expires in 2004. This amount will be available to offset
like amounts of any future taxable gains.
